Shore Bancshares, Inc. · NASDAQ:SHBI
Shore Bancshares — Investor Presentation (July 2020)
32 slides from Shore Bancshares's investor presentation, Jul 27, 2020
Slide 1: Investor Presentation July 2020
1 Investor Presentation July 2020
Slide 2: Forward-Looking Statements
2 This investor presentation contains, and future oral and written statements of Shore Bancshares, Inc. (the “Company” or “SHBI ”) and its wholly - owned banking subsidiary, Shore united bank (the “Bank”), and its management may contain, statements about future events that constitute forward - looki
Slide 3: Management Team
3 Management Team * Reference Appendix section for biographies Name Title/Function Entity Years in Banking Years with Company Lloyd L. “Scott” Beatty, Jr. President and Chief Executive Officer SHBI, Bank 26 14 Edward C. Allen EVP and Chief Financial Officer SHBI, Bank 42 9 Donna J. Stevens EVP and C
Slide 4: Financial Summary and Key Ratios
4 Financial Summary and Key Ratios Financial Ratio 12/31/19 YTD Ann. 6/30/20 Return on Average Assets 1.03% 1.07% Return on Average Equity 8.24% 8.65% Net Interest Margin 3.47% 3.45% Non - interest Income/Average Assets (1) 0.69% 0.64% Non - interest Expense/Average Assets (1) 2.52% 2.26% Efficiency
Slide 5: Locations
5 Locations SHORE BANCSHARES Headquarters 28969 Information Lane Easton, MD 2160 BANKING Shore United Bank 18 E. Dover Street Easton, MD 21601 877.758.1600 ShoreUnitedBank.com LOAN PRODUCTION OFFICES Shore United Bank 651 N. Broad Street, Suite 201 Middletown, DE 19709 9748 Stephen Decatur Highw
Slide 6: Strategic Direction
6 Strategic Direction Market Expansion LPO’s and Strategic Branching Acquire Banks Contiguous to our Existing Markets Leverage Back Office Capability Additions to Staff Have Been Primarily Production Operating Strategy Drive Profitability Emphasis on Core Deposits & Cost of Funds C
Slide 7: Maryland Market Rank, Share and Highlights
7 Maryland Rank Share Branches Talbot 1 40.81% 4 Queen Anne’s 2 25.28% 5 Caroline 3 15.61% 2 Kent 5 8.91% 1 Dorchester 7 4.59% 1 Worchester 12 0.50% 1 Howard 14 0.38% 1 Baltimore 16 0.86% 2 Delaware Rank Share Branches Kent 6 5.52% 4 Virginia Accomack 5 1.60% 1 Selected SHBI Market Highlights 2020
Slide 8: Market Rank by Deposits
8 Market Rank Local Rank Ticker Company Name City (HQ) HQ State Branches 2019 Total Deposits 2019 ($000) ’19 Market Share (%) 1 – BAC Bank of America Corp. Charlotte NC 40 6,899,861 19.6% 2 – MTB M&T Bank Corp. Buffalo NY 56 5,231,164 14.9% 3 – PNC PNC Financial Services Group Inc. Pittsburgh PA 61
Slide 9: Operating in Stable Mid-Atlantic Markets
9 Operating in Stable Mid - Atlantic Markets Source: US Bureau of Labor Statistics Rank State May 2020 Preliminary Unemployment Data Total Deposits (in thousands) Rank State May 2020 Preliminary Unemployment Data Total Deposits (in thousands) 1 Nebraska 5.2 27 Indiana 12.3 2 Utah 8.5 28 South Caroli
Slide 10: Recent Developments: Paycheck Protection Program
10 Recent Developments PAYCHECK PROTECTION PROGRAM (PPP) Shore United Bank team responded quickly to identify impacted customers At 6/30/2020 1,427 loans booked for approximately $122,955,423 22% of loans to new customers Funds are provided in the form of loans that will be fully forgiven wh
Slide 11: Targeted, Organic Balance Sheet Growth
11 0.17% 0.13% 0.10% 0.04% 0.12% 2016 2017 2018 2019 2020Q2 $968 $1,179 $1,186 $1,303 $1,465 2016 2017 2018 2019 2020Q2 $1,160 $1,394 $1,483 $1,559 $1,720 2016 2017 2018 2019 2020Q2 Total Deposits ($M ) Total Assets ($M ) Total Gross Loans Held for Investment ($M) NCOs / Avg. Loans Targeted, Organic
Slide 12: Strong, Consistent Historical Profitability
12 $3 $10 $11 $16 $16 $5 2016Y 2017Y 2018Y 2019Y 2020Q2 3.56% 3.76% 3.74% 3.54% 3.45% 2016 2017 2018 2019 2020Q2 0.84% 0.87% 1.15% 1.08% 1.07% 1.74% 2016 2017 2018 2019 2020Q2 Net Income from Continuing Operations ($M) ROAE from Continuing Operations ROAA from Continuing Operations NIM (FTE) Strong,
Slide 13: Income Statement (Quarterly)
13 Income Statement (Quarterly) Dollar Value in Thousands 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 Interest and Fees on Loans $13,749 $14,100 $14,043 $13,795 $13,945 Other Interest Income 1,000 1,093 1,122 891 649 Interest Income 14,749 15,193 15,165 14,686 14,594 Income on Deposits 2,2047
Slide 14: Loan Balances Modified Due to COVID
14 Loan Balances Modified Due to COVID - 19 Through 6/30/20 Dollar Value in Thousands Total Loan Balance as of 6/30/2020 Loans Modified to Interest Only Payments (6 Months or Less) Loans Modified to Payment Deferral (3 Months) Total Loans Modified Percentage of Loans Modified Hospitality Industry $1
Slide 15: Loan Portfolio by Type
15 (Dollar Value in Thousands) As of June 30, 2020 Loan Type Balance % of Total Construction $110,657 7.9% 1 - 4 family residential 14,528 Other 96,129 Residential Real Estate 430,436 30.6% Secured by 1 - 4 family - revolving 51,146 Secured by 1 - 4 family - closed end 342,851 Secured by multifamily
Slide 16: Hospitality Loans
16 100% of the portfolio was pass rated Geographically, there is a concentration in hotels based at the beach in Ocean City, MD which has rebounded nicely due to opening back up in June of 2020 20 Hospitality loans comprise of Hotels, Motels and Inns, which make up $112.5mm or 8.0% of the tota
Slide 17: Hospitality Loan Maps
17 MD/DE Beaches Chesapeake Bay Region Myrtle Beach Area
Slide 18: Retail and Restaurant Breakdown
18 Retail and Restaurant Breakdown Total Portfolio Deferred Portfolio Retail Exposure Outstanding ($000) % of Loans (%) LTV (%) Outstanding ($000) % of Portfolio (%) % of Loans (%) LTV (%) Retail Strip Centers – Grocery (Anchor) $31,114 2.2% 54.1% $15,977 51.4% 1.1% 67.2% Retail Strip Centers – Mult
Slide 19: Non-Owner Occupied Retail Stores
19 $3,878,102 $15,327,031 $81,991,867 $250,000 or less $250,000 - $1mm Over $1mm $101.2mm Non - Owner Occupied Retail Stores Non - owner occupied retail store loans comprise of $101.2 mm or 7.2% of the total loan portfolio $59.2 million, or 58.5% of the loans have secured a payment modification
Slide 20: Owner Occupied Retail Stores
20 $2,393,534 $9,127,026 $6,237,330 $250,000 or less $250,000 - $1 mm Over $1mm $17.8mm Owner Occupied Retail Stores Owner occupied retail store loans comprise of $17.8 million or 1.3% of the total loan portfolio $2.6 million, or 14.8% of the loans have secured a payment modification as of June
Slide 21: Restaurants
21 $1,789,000 $3,909,825 $1,403,000 $250,000 or less $250,000 - $1mm Over $1mm $7.1 mm Restaurants 100% of the portfolio was pass rated Owner occupied restaurant loans comprise of $7.1 mm or 0.5% of the total loan portfolio $2.1 million, or 29.3% of the loans have secured a payment modificatio
Slide 22: Restaurants Map
Restaurants Map | patted 22
Slide 23: Credit Quality Statistics
23 Dollar Values in Thousands 6/30/2019 6/30/2020 Non - performing Assets Nonaccrual Loans $14,592 $11,649 90+ or More Days Past Due 439 604 Other Real Estate Owned 524 38 Total Non - Performing Assets $15,555 $12,291 Performing TDRs $7,768 $7,312 Total NPAs + TDRs $23,323 $19,603 NPAs / Assets (%)
Slide 24: Securities Portfolio
24 (Dollars in thousands) Amortized Cost Gross Unrealized Gains/(Losses) Estimated Fair Value Available - for - sale securities: June 30, 2020 U.S. Government Agencies $9,710 $79 $9,789 Mortgage - backed 73,551 2,680 76,231 Total $83,261 $2,759 $86,020 Held - to - maturity securities: U.S Government
Slide 25: Attractive Deposit Base
25 (Dollar Value in Thousands) June 30, 2020 Deposit Type Balance % of Total Average Rate (%) Noninterest Bearing Demand 442,966 29.4 0.00 Interest Bearing Demand 344,940 22.9 0.37 Money Market & Savings 438,103 29.2 0.34 CDs $100,000 or more 129,467 8.6 1.83 Other Time 149,222 9.9 1.58 Total Deposi
Slide 26: Strong Capital and Asset Growth
26 1,135 1,160 1,394 1,483 1,559 1,720 11.93% 12.32% 10.38% 11.13% 11.24% 10.26% 4% 8% 12% 16% 20% $0.00 $400.00 $800.00 $1,200.00 $1,600.00 $2,000.00 2015 2016 2017 2018 2019 2020Q2 Total Assets TCE/TA Strong Capital and Asset Growth
Slide 27: Capital Ratios (Bank Only)
27 Capital Ratios (Bank Only) 9.79% 10.64% 10.66% 11.84% 13.00% 13.26% 11.84% 13.00% 13.26% 12.73% 13.87% 14.14% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% YE 2018 YE 2019 6/30/2020 Tier 1 Leverage Ratio Common Equity Tier 1 Tier 1 Risk-Based Capital Ratio2 Total Risk-Based Capital Ra
Slide 28: Investment Considerations
28 Compelling Investment Considerations Excellent Cost of Funds Strategic plan positioned for organic growth and acquisitions Focused on creating sustainable competitive advantages Strengthened noninterest revenue sources Driving a sales culture with both a commercial and retail focus whil
Slide 29: Appendix
Shore Bancshares} Appendix 29
Slide 30: SHBI Management Team
30 SHBI Management Team Talent, depth, unique skills Lloyd L. “Scott” Beatty, Jr ., 67, CPA, President & CEO of Shore Bancshares, Inc. since June 2013, Director of SHBI since December 2000, Director of Shore United Bank (formerly the Talbot Bank and CNB) since 1992. COO from 2006 until 2012 and na
Slide 31: Consolidated Historical Balance Sheet
31 Dollar Values in Thousands 2016 2017 2018 2019 6/30/2020 Assets Cash and Cash Equivalents $75,938 $31,820 $67,225 $94,971 $126,284 Available for Sale Securities 163,902 196,955 154,432 122,791 86,020 Other Securities 1,650 3,735 7,745 5,532 16,724 Total Cash & Securities 248,194 238,757 235,445 2
Slide 32: Consolidated Historical Income Statement
32 Consolidated Historical Income Statement Note: 6/30/2020 data is YTD Source: S&P Global Market Intelligence Dollar Values in Thousands 2015 2016 2017 2018 2019 6/30/2020 Interest and Fees on Loans $35,126 $37,155 $43,617 $51,332 $55,391 $27,740 Other Interest Income 3,745 3,497 4,184 4,575 4,376